Now is a great time to enter the crypto market

The period from mid-May 2021 to late June 2021 has not been so kind to a number crypto investors. Most of the cryptocurrencies lost significant share of their market capitalization due to falling unit prices. Of course, there are investors who are benefitting big time from the price fall. For example, investors who acquired Bitcoins when the unit price was still less than $10,000 (in mid-July 2020) and held on until the price hit $63,314.01 on 15 April 2021 must have been able to make handsome profit from the sell-off (if indeed they sold their investments).

Investors who lost are those who bought into Bitcoin, Ethereum, Litecoin, Bitcoin Cash, Yearn Finance and many other cryptos in April to mid-May 2021 when their prices were hitting new all time highs (ATHs). These investors’ assets have soon lost quite a chunk in value. For example, Bitcoin fell by 54% from its ATH of $63,314.01 on 15 April 2021 to $29,161.81 on 22 June 2021.

Yet they are only losers if they subsequently sold off their Bitcoins at a loss in fear of their assets losing more value. Investment wisdom will tell you to hold on to your crypto investments despite the fall in prices because crypto prices rise and fall very fast. The graph below shows how the Bitcoin price has performed so far from 2013 when it was around $114.00 to mid-April 2021 when it reached its $63,314.01 ATH to date. 

Source: CoinMarketCap.com

The graph also shows that the recent sell-off is not the first time the Bitcoin price has had volatile bullish (i.e. upward) and bearish (downward) movements. For example, the price was $963.74 on 31 December 2016. On 16 December 2017, the price was at an ATH of $19,497.40 – a 1923.10% increase in a space of a year. Yet the same price fell to $8,269.59 on 8 February 2018 (2 months later) and on 31 December 2018 it stood around a mere $3,923.32 – an 80% decline from the then ATH. Now that is real price volatility that no fiat currency, commodity or stock can match.

On 29 June 2019, the price had risen by 205% to 11,959.37. On 15 March 2020, the Bitcoin price fell by 55% to $5,392.31 and then sharply rose by 445% to 29,374.15 on 31 December 2020. By 13 April 2021, the Bitcoin price increased by a further 117% to reach its current ATH (to date) of $63,729.50.

This type of price volatility is rife across most of the +5,000 cryptocurrencies. For example, Ethereum – the second largest crypto by market capitalization – rose by 458% from $730.37 on 1 January 2021 to the current ATH of $4,079.06 on 14 May 2021. The same Ethereum price recently fell by 56% to $1,813.22 on 25 June 2021 (see graph below).

 Source: CoinMarketCap.com

Remember, a number of crypto investment fundis project the Bitcoin price to get very close to $100,000 just this year alone. So, investors may be wise to hold on to their investments until the bulls beat the bears in crypto. I am convinced we will soon see an upswing in BTC, Ethereum, Litecoin, Bitcoin Cash, Binance, Yearn Finance, Dogecoin and their friends.

In fact, the historical price volatility of Bitcoin and other leading cryptos gives credence to the view that now is a good time to buy leading cryptos while their prices remain low. It is not beyond justification to anticipate the current Ethereum price of between $1,730 (on 26 June 2021) and $2,000 (as of 27 June 2021) to reverse the recent bearish movement and become bullish enough to exceed the $4,079.06 all-time high (ATH) price before this year ends.

The forecasted bullish turnaround in major cryptos may even be kind to new entrants such as the Internet Computer Protocol (ICP) coin – a new crypto that entered the market at a unit price of +$460.84 on 10 May 2021. Its price then rose by 26% to an ATH of $580.38 on 11 May 2021, and then significantly fell by 95% to $29.08 on 26 June 2021. Buying ICP now is a great discounted investment opportunity.

Of course, it is possible that crypto prices may fall further before they improve. Some analysts predict the Bitcoin price to fall further and come close to $20,000 in the very short term before it turns bullish again towards $100,000 before this year ends. The increasing resistance of some governments, central banks and financial regulators against crypto currencies may stimulate further price falls in the short term.

However, Bitcoin and Ethereum alone have presented a solid case that cryptos are fast penetrating and increasing their share of the global system of payments. Banks and governments will eventually have no choice but to follow EL Salvador’s example and accept credible cryptos (starting with Bitcoin and Ethereum) as modes of payment. So, if indeed the current crypto prices fall further, there is more justification to invest now in cryptos.

Of course, for newbie crypto investors, investment wisdom tells you to take a low-risk approach and start by investing in the less-costly cryptos that have more than, or a little less than, a billion Dollars in market capitalization. Examples of such low-risk cryptos (costing a little more or less than a Dollar each) include ADA, Dogecoin, XRP, Polygon, VeChain, Algorand and Shiba Inu. There are many more.

This is my un-expert view. You will have to consult and trust your investment advisors before making any moves. I just see the present time as a great opportunity to invest in credible cryptos.

I wish you a happy and successful crypto-investing venture!

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